Welcome to another edition of Ecosystem Builder's Edge. This newsletter is where I share ideas and insights from my journey in implementing ecosystem building practices, helping you access hard-earned wisdom to accelerate your own path.

Dear Ecosystem Builders,

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In today's newsletter, we are explore some groundbreaking ideas that challenge traditional thinking about nonprofits, growth, and social impact. These concepts are largely drawn from my recent studying of Dan Pallotta's insightful TED talks, books (Uncharitable and The Everyday Philanthropist) and now movie can have profound implications when applied to innovation ecosystems.
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Five Barriers Holding Nonprofits Back
(and How to Overcome Them)

Pallotta identifies five key areas where nonprofits face a disadvantage to attaining their mission compared to for-profit entities:

Barrier #1: Competitive Compensation: Non-profits often pay well below market salaries and fail to attract or retain the best talent.
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​Solution #1: Shift mindsets to reward capable talent. Paying fairly based on the value created and results achieved ensures your organization is poised for impact.

Barrier #2: Calculated Risk Taking: Non-profit leaders are often discouraged from taking smart financial risks for long term impact. Decisions are often made based on yearly budget cycles.
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​Solution #2: Encourage strategic innovation and risk for longer term outcomes. Embrace failures as a stepping stone to success, learning and growth, just like for-profit entities do.

Barrier #3: Advertising + Marketing: Advertising and Strategic Communications are viewed as unnecessary overhead.

Solution #3: Treat marketing as an investment in mission visibility, growth and sustainability. Increase outreach, build a movement, and amplify your message through stories.

Barrier #4: Patient Capital: Non-profits aren't given much runway to build momentum beyond yearly funding cycles.

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​Solutions #4: Focus on long-term capital strategies that allow non-profits to grow and experiment, and think bigger. Work with funders that understand and partner in your mission and approach.

Barrier #5: Profitable Returns: Non-profits rely mostly on philanthropic grants or donations, often with strings attached, limiting their scalability and impact.

Solution #5: Consider new revenue models and sustainable funding streams and communicate with funders to quantify your impact.

Growing the Pie: A New Paradigm for Nonprofit Problem Solving

Pallotta argues convincingly that to solve some of our most difficult challenges, we must shift our focus from "minimizing overhead" to "maximizing results". Here are key takeaways for ecosystem builders:

1. Invest in Growth: Don't shy away from spending and being creative on strong staff, fundraising and marketing capabilities. These investments can dramatically increase your overall impact and help support the infrastructure required to scale.
2. Think Big: Set audacious goals and invest accordingly. Think an order of magnitude bigger than you've been pursuing and invite aligned funders along on the journey.
3. Measure Impact, Not Overhead: Focus on the critical change you're creating, not the % spent on administration. Leverage donors that understand needs beyond programs.
4. Attract Top Talent: Be willing to offer competitive compensation to attract the best minds to solve our biggest social problems.

Implications for Ecosystem Builders

As ecosystem builders, we're uniquely positioned to drive this paradigm shift:

1. Educate Stakeholders: Help shift the conversation from yearly budget cycles and overhead ratios to impact metrics with longer time horizons.
2. Advocate for Policy Changes: Push for reforms that allow nonprofits more flexibility in how they operate and grow and consider innovative business structures.
3. Foster Innovation: Create spaces where nonprofits can take calculated risks and test new approaches to growth and impact. This starts with the board and leadership.
4. Build Cross-Sector Partnerships: Leverage the strengths of both for-profit and nonprofit sectors to drive social change.

The Opportunity Ahead

There's enormous potential in the nonprofit sector that remains untapped due to outdated thinking. Pallotta notes that if we could move charitable giving from 2% to 3% of GDP, it would result in an additional $150 billion annually for social causes.

As ecosystem builders, we have the power to unlock this potential. By embracing these new ideas and advocating for change, we can help create a nonprofit sector that's truly equipped to solve our most pressing social challenges.

Let's dream big, invest in growth, and measure what truly matters - the impact we're making on the world.

I'd love to hear your thoughts on these ideas. How can we start implementing these concepts in our own ecosystems? Have you experienced any of these differences between for-profit and nonprofit roles? Reply to this email with your insights!

Highlighted Events

Stay connected with upcoming events where ecosystem builders gather:
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• ​Startup Mountain Summit (Nov 8 - 9, 2024) - Johnson City, TN
• ​SBA 4th Annual Innovation Ecosystem Summit (Nov 14 - 15, 2024) - Virtual
• ⭐ Roadmap Summit led by NSF and EDA (Dec 3 - 4, 2024) - Washington, DC
• ​State Science Technology Institute (SSTI) (Dec 10 - 12, 2024) - Phoenix, AZ
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Funding Opportunities

Track important open funding programs for ecosystem efforts:

• ​EDA Build to Scale (Due: Oct 28, 2024)
  • The Build to Scale (B2S) program aims to increase the capacity of entrepreneurs in regions throughout the United States to demonstrate, deploy, and deliver new technologies by starting and growing new companies and creating and sustaining new, good jobs.
  • Up to $5M per award, $50M total available - Requires a 1:1 match commitment - EDA has also implemented a Tech Hubs and NSF Engines benefit of designation with additional consideration for B2S proposals aligned with a Tech Hub’s or Engine’s strategy.
• ​NSF Regional Resilience Innovation Incubator Letter of Intent (Due: Dec 16, 2024)
  • This solicitation, focused on Phase-1, will fund a series of pilot projects focusing on project concept creation and refinement for solutions specific to a U.S. climate region.
  • Phase 1 funding is up to $500,000 for a two-year duration to support partnership building, refinement of the proposed regional climate challenge, and conceptual development of potential solutions.
• ​Good Jobs in Clean Energy Prize (Due: Jan 31, 2025)
  • The Good Jobs in Clean Energy Prize is designed to encourage coalition-building in communities across the country that focus on creating quality jobs and fostering an equitable and inclusive workforce in clean energy sectors.

Timely Reads

Engage in insightful conversations on ecosystem building from around the web this week:

• ​NSF advances 71 teams spanning nearly every U.S. state and territory in the second Regional Innovation Engines competition​
• ​EDA’s Good Jobs Challenge Helps Miami Students Design New Careers​
• ​Why Women Get Less Than 3% Of VC Funding – And What We Can Do About It​
• ​Regional Innovation Sustainability Strategy through Integrated Innovation Governance​

Until next time, keep shining 🌟!

P.S. A quick note of thanks to our affiliates Airtable and Amazon who help keep this newsletter free.